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An announcement is due later on which company will run the West Coast mainline. The decision to award the franchise to FirstGroup was scrapped over "technical flaws" in the bidding process. The transport secretary will appear before MP's to explain the costly u-turn.

The Department for Transport (DfT) did not follow its own rules over the bidding process for the West Coast main line franchise, which runs through the North West, Virgin boss Sir Richard Branson has told MPs.

This bid by FirstGroup is absolutely preposterous. It's completely ridiculous. It's taking the system for a ride."

– Sir Richard Branson

Committee member Kwasi Kwarteng said people might say that Virgin, in taking legal action, was "bringing in the heavy artillery" and that Sir Richard was "using your prestige and fame" to challenge the decision.

Sir Richard said he "created a number of ventures with the principle aim of making a real difference to those sectors. The profit motive is not important to me. I am lucky enough to afford breakfast, lunch and dinner every day for the rest of my life."

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Sir Richard Branson gives evidence to the House of Commons Transport Committee in the House of Commons. Credit: PA

The Department for Transport (DfT) did not follow its own rules over the bidding process for the West Coast main line franchise, which runs through the North West, Virgin boss Sir Richard Branson has told MPs.

The rail franchise system is "flawed", Sir Richard told the House of Commons Transport Committee. He was giving evidence after Virgin Trains launched a judicial review of the DfT's decision to award a new 13-year West Coast franchise to rival transport company FirstGroup.

Sir Richard told MPs: "The Virgin (West Coast franchise) bid is more deliverable and much more financially robust.

The DfT did not follow their own rules. The franchise system is flawed. The decision is bad for the country, bad for passengers and bad for passengers on other franchises."

He said the Government should not be running a franchise process that was risky rather than one that aided passengers.

Sir Richard added that the interests of passengers should be "at the heart" of the franchise bidding process and that there should be "no repeat of this fiasco".